Student loan garnishments are also known as an informal form of child support and formally known as Administrative Wage Garnishments when discussed in legal context, which means that it means basically the same thing as what you might imagine child support to mean. This is designed to make sure that you keep on making your payments on time, even if you are unemployed or underemployed, or have had some financial difficulties in the past. You can also pay back your loan with a simple check for a certain amount of money that has been set by the court. The money will then go directly to your lender. However, there are many different options that you can explore with the help of a professional who is experienced with these kinds of legal proceedings.
There are two main options for a student loan wage garnishment, you can choose to have it directly applied to your bank account, or you can ask for a block on your bank account. There are pros and cons for each option, but the court usually leaves the decision up to the bank since they are the ones that you have to pay the money to in the first place. In other words, you can request that a block be put on your bank account so that all payments are sent to the debt collection agency instead. With this, you can easily avoid any other financial hardship that may occur if your loan goes into default.
Another option that you can explore is to have your wages garnished at the first hint of financial hardship. At this point in your life, you should have consolidated all of your student loans into one. If you did not do this, it would be easy for your loan company to simply add the wage garnishment to the end of your contract, without you even knowing about it. You will now only know about it when your paycheck comes in.
Before you go into the specifics of your student loan wage garnishment, you need to understand some things about the law. There are many different laws that pertain to student loans, including how much time you have to be notified. The U.S. Department of Education can automatically issue a notification of intent to garnish your wages. The time period can range anywhere from three days to a few months, depending upon your school and the state that you are in. Some states allow the secretary to send the notifications through the mail while others require you to be given a formal written notice. If you do receive a notice, it is advised that you check with the U.S. department of education’s website to find out what the process will be.
If you do go into a student loan debt bankruptcy, there are also certain things you need to know. Because filing for bankruptcy means that you will not be able to make anymore payments on your student loans, the consolidation company will not help you once you file for bankruptcy. You will also not be allowed to participate in any federal student loan programs that are funded by the government, such as the Direct Plus Student Loan or Perkins Loan programs. If you need help with filling out the forms, contact the financial aid office at your college.
There is one exception to the student loan wage garnishment: if your school has not received its federal Student Loan forgiveness funding. This forgiveness program allows you to keep your payments even after you have filed for bankruptcy. In order to qualify, you need to demonstrate extreme financial need. You can’t just say “I need money” and expect the government to give you the money – you have to provide specific documentation.
There are two types of garnishments you can get if you are forced to repay; debt-to-income and income-based. For a debt-to-income garnishment, the collection agency can require you to pay the full amount owed on your student loans, including any interest and fees you owe. On the other hand, an income-based garnishment requires the collection agency to first calculate your income and apply it to the amount owed on your student loans. The agency will then take any excess amount from your bank account until it is repaid.
To learn more about loan rehabilitation and student loan wage garnishment, contact a professional consumer advocate or a legal clinic. They can give you more information about your rights. If you are forced to repay your debt, contact the institution that provided you with the loan. Often times, they can negotiate a payment plan with you to help reduce your debt and prevent wage garnishment. If they cannot reach an agreement with you, they may seek legal action against you.